HL Deb 28 March 2000 vol 611 cc635-8

2.45 p.m.

Baroness Young

asked Her Majesty's Government:

Whether they consider that universities will be able to recruit and retain staff following the estimated 1 per cent fall in the value of government grants for the "unit of resource".

The Minister of State, Department for Education and Employment (Baroness Blackstone)

My Lords, the recruitment and retention of staff is a matter for higher education institutions. Our spending plans made substantial extra funds available for higher education: a real terms increase of 11 per cent over four years. We are clear that, unlike the previous government, which dealt harshly with university funding, we are giving universities and colleges the chance to improve the quality of their teaching and research. The 1 per cent efficiency saving reflects a recommendation made by the Dearing Report on the funding of higher education.

Baroness Young

My Lords, I thank the Minister for that reply. However, is she aware that Sir Brian Fender commented that the recent funding is less than satisfactory, particularly in recruiting and rewarding staff? Is she further aware that, unless universities recruit and retain the very best staff, they will cease to be very good universities and that young people will go abroad? There is already evidence that the best are going to the United States. This is a serious issue which I hope the Government will address.

Baroness Blackstone

My Lords, I am aware of the remarks made by Sir Brian Fender. It is always very nice when we can provide more funding. I have no doubt that many people in universities have expectations of more in future. However, as I stated in my initial reply, the Government have put a substantially increased amount of funds into our universities, which compares with substantial cuts under the former government.

Between 1989 and 1997 there was a 36 per cent decline in the unit funding of our universities and a 6.5 per cent projected efficiency saving for the first two years. In comparison, this Government are being immensely generous. I am aware of the importance of recruiting good staff for our universities. I believe that the profession still attracts many able young people. I am aware of the report of the Bett Committee and proposals from that committee for improvements. We are considering the whole question in the next spending review, but I cannot anticipate the outcome.

Baroness Lockwood

My Lords, is my noble friend aware of the sense of relief at the Government's funding of universities in bringing the unit of resource, the efficiency gains, down to 1 per cent as against the very severe decline in the unit of resource over the previous decade under the former administration? Is she further aware that there is now a real sense of concern about uncompetitive salaries within the higher education system? Can she assure us that in the comprehensive spending review due later this year, the problems of universities will be given very real attention?

Baroness Blackstone

Yes, my Lords, I am aware of the relief which greeted the arrival of the new Government and their changed position in relation to funding of universities. I was a head of a university institution who, along with other heads of such institutions, was in despair at the end of the former Government's time in office. I am aware of the points raised by my noble friend. As I have said, in the next comprehensive spending review we shall be looking at higher education funding, and many other areas, but I cannot anticipate the outcome.

Baroness Sharp of Guildford

My Lords, is the Minister aware that the bulk of the funding provided for the higher education sector in the last comprehensive spending review was used to make good the backlog on capital expenditure on equipment rather than on salaries? Given the expansion in the numbers of students, as the noble Baroness pointed out, the unit of resource is going down. This problem is particularly acute in science and engineering departments. Is not the Minister worried, given the degree to which some of our industries—the pharmaceutical sector in particular—are dependent on taking on high quality graduates in those disciplines, that the uncompetitiveness of teaching salaries is running down those departments to the detriment of our industries?

Baroness Blackstone

My Lords, I am aware that quite a high proportion of the additional expenditure has been allocated to capital projects. However, I believe that that was what the universities wanted. Their infrastructure was in such an appalling state after the severe cuts that were made under the previous administration that it has been necessary to put this right. Of course am also aware of the fact that salaries in higher education have not risen as much as they have in many other parts of the public sector. However, as I have already said, it is a matter for universities to decide how much of their extra funding they use for academic pay. I can only repeat once more what I have already said about the next spending round.

Lord Forsyth of Drumlean

My Lords, on the very day that the Prime Minister has sought to wrap himself in the skirts of Britannia, can the Minister tell the House that she will end the discrimination against English students attending universities in the United Kingdom who need to pay fees, and against English universities where Scottish students attending English universities need to pay fees? If New Labour truly stands for a United Kingdom and for fairness, is it not high time that the Government responded to the expectations they raised at the time they were elected to office that funding would be made available for higher education?

Baroness Blackstone

My Lords, as regards the issue of discrimination—I believe that was the term used by the noble Lord—I refute that this is a matter of discrimination. We have a devolved system. If Scottish institutions and the Scottish Executive choose to spend their money in a different way, that is a matter for them. I do not accept that English students are discriminated against. They may make decisions on a voluntary basis about where they attend university. They can decide whether to stay in England or move to Scotland.

In response to the noble Lord's point on investment in higher education, the Government are doing exactly what they said they would do: over the four years from 1998–2002, we are investing an additional £1 billion. That represents an 11 per cent increase in real terms and a 22 per cent increase in cash terms. Furthermore, that sum represents a much greater investment than anything done by the previous government during their period in office.

Lord McCarthy

My Lords, does the Minister accept that the Government have been slow to realise the extent of the damage done to the public services by 14 years under the previous government, during which they squeezed pay in the public sector? This is already beginning to have an impact on this Government's only attempt to make various improvements in various parts of the public sector. For example, we almost had no schoolteachers so that we could not do what we wanted to do in education. We almost had no nurses so that we could not do what we wanted to do in the health service. Unless we do something about rates of pay in higher education, we shall not be able to fulfil our objectives in that area either.

Baroness Blackstone

My Lords, I am afraid that I do not accept what my noble friend has said. We have made very substantial pay increases—far above inflation levels—to both teachers and nurses.

The Lord Privy Seal (Baroness Jay of Paddington)

My Lords, while I am obviously in the hands of the House, because we have reached 17 minutes of Question Time, I believe that we should probably move on.